OMB
ESTIMATE: P.L.107-147 provides up to 13 weeks of temporary, extended
unemployment benefits in all States. These benefits would be available
through December 31, 2002 and would be 100 percent Federally-funded.
States that meet certain requirements would be eligible for an
additional 13 weeks of temporary extended unemployment benefits
for workers who exhaust the initial 13 week extension. P.L. 107-147
also makes temporary business tax reductions that provide an additional
first-year depreciation deduction and extend the carryback period
for Net Operating Loss. In addition, the Act provides a number
of tax incentives for reconstruction of businesses located in
the New York Liberty Zone (a specified area surrounding the site
of the World Trade Center) or relocated from the Liberty Zone
to elsewhere in New York City. The Act also extends certain tax
provisions that expired at the end of calendar year 2001 and makes
other miscellaneous tax changes. P.L. 107-147 also provides 2002
funding for the Temporary Assistance for Needy Families (TANF)
supplemental grant program and contingency fund. Other provisions
in the Act increase payments to Puerto Rico and the Virgin Islands
for the rum cover over and adjust the formula used to determine
premiums paid to the Pension Benefit Guaranty Corporation (PBGC)
. The Act designates the revenue losses and spending in the bill
as emergency requirements for pay-as-you-go purposes. As a result,
the amounts shown below for the Act will not be incorporated into
the pay-as-you-go scorecard.

(Fiscal
years; in millions of dollars)

2002

2003

2004

2005

2006

2007

Pay-as-you-go
costs:

Outlay
effect:

Unemployment insurance

7,144

2,925

0

0

0

0

TANF..............................

144

138

63

0

10

15

Other................................

51

170

-1

-42

-48

-73

Subtotal,
outlays..............

7,339

3,233

62

-42

-38

-58

Revenue
effect..................

-39,199

-33,645

-28,970

2,959

20,676

14,837

Net
pay-as-you-go costs...

46,538

36,878

29,032

-3,011

-20,714

-14,895

Memorandum:

Off-budget
net costs.........

0

0

-10

0

0

0

CBO
ESTIMATE:

(Fiscal
years; in millions of dollars)

2002

2003

2004

2005

2006

2007

Pay-as-you-go
costs:

Outlay
effect:

Unemployment insurance

8,215

3,360

0

0

0

0

TANF..............................

63

64

64

65

34

33

Other................................

65

163

-4

-42

-48

-73

Subtotal,
outlays..............

8,343

3,587

60

23

-14

-40

Revenue
effect..................

-42,526

-39,335

-29,048

-3,548

16,101

16,814

Net
pay-as-you-go costs...

50,869

42,922

29,108

3,571

-16,115

-16,854

Memorandum:

Off-budget
net costs.........

0

10

-10

0

0

0

EXPLANATION
OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:

CBO estimates net costs of the Act at $93.5 billion over the period
2002 through 2007, $19.7 billion more than the OMB estimate of
$73.8 billion. Of the $19.7 billion difference, $18.2 billion
is in estimates of the revenue effect. Most of this difference
is for the temporary business tax reductions, resulting from different
baselines and estimating models. The remaining difference is largely
the result of different estimates for unemployment insurance resulting
from different economic assumptions.